States seek Build America Bonds extension – Final vote on Dodd-Frank could come at week's end – If no replacement for Byrd this week, Dems must pick off 3 GOP senators – WSJ: BP close to selling stake

DELAYED IMPACT – POLITICO’s Chris Frates and I report on the long phase in period for some of President Barack Obama’s signature legislative initiatives: “[B]y the time those reforms finally arrive, [Obama] could be long gone from the White House. … In fact, buried deep within some of the Democrats’ most significant reform bills are dozens of policy time bombs set to blow at more politically convenient times. The Democratic reform triumvirate — health care, Wall Street and energy — is filled with provisions designed to front-load policy benefits and delay political pain. Health care reform cracks down on insurers right away but won’t force people to buy insurance until 2014 … [U]nder the Wall Street reform bill … banks won’t feel its full force for more than 10 years. And even Democrats’ nascent immigration reforms include at least an eight-year wait before illegal immigrants can apply for permanent residency — after Obama leaves office.” http://bit.ly/bJAqAs

Story Continued Below

STATES SEEK BUILD AMERICA BONDS EXTENSION – Despite some criticism that they are mainly a boon for Wall Street underwriters, a number of state and local groups including the Council of State Governments have written to leaders of the Senate Finance Committee asking for the Build America Bonds program to be extended beyond the end of the year: “We understand that such an extension was part of the American Jobs and Closing Tax Loopholes Act legislation which the Senate was unable to consider because of objections that had little or nothing to do with its BABs extension provisions. … We believe most strongly that such an extension is both prudent and necessary.” Full letter http://politi.co/acdS8i

WHEN WILL THEY VOTE? – Looks like a final vote on Dodd-Frank in the Senate won’t come until Thursday or Friday at the earliest. A temporary replacement for late-Sen. Robert Byrd (D-W.Va.) may not be named this week. That would leave Democrats needing three Republicans. Sen. Susan Collins (R-Maine) is a “yes” and her Maine GOP colleague Olympia Snowe is expected to support cloture as well. Sen. Scott Brown (R-Mass.) has not said a definitive “yes” yet but he would presumably be the third GOP vote, eliminating the need for Democrats to win over Sen. Chuck Grassley (R-Iowa), who has expressed disapproval of using TARP and FDIC premium money to pay for the bill.

SCOOP – WSJ’s Deborah Solomon reports on pg. A4: “The Obama administration, stymied by a deficit-wary Congress reluctant to replenish stimulus spending, hopes to combat unemployment by using existing programs that have not been fully implemented. Key among them is an expiring tax credit that rewards companies hiring unemployed workers. The Joint Committee on Taxation estimated the stimulus program would cost $13 billion. The Treasury Department estimates the initiative so far has cost less–about $8.5 billion–because it has not been fully taken advantage of.” http://bit.ly/bUdefM

Good Monday morning. Congrats to Spain. Empire State Building was lit up in yellow and red last night to celebrate the World Cup victory. Listen to Spanish announcers call the winning goal, via HuffPo. http://huff.to/bEOKV7

SHAMEFUL – Reuters reports bombs ripped through two establishments packed with World Cup watchers in the Ugandan capital of Kampala, killing at least 64. http://bit.ly/bdgvkm

DRIVING THE WEEK – Huge week for corporate earnings with Alcoa reporting today after the close. Among other big names: JPMorgan Chase and Google report on Thursday and Bank of America, Citigroup and G.E. on Friday. The overall numbers should be strong, on average about 25 percent over last year’s week second quarter. But the real story will be in the corporate outlook for the rest of the year. Serious skepticism could bode ill for hiring and the economy as a whole. … U.S. Chamber of Commerce on Wednesday hosts its jobs summit, previewed by M.M. last week.

** A message from GE Capital: GE Capital provides critical financing to thousands of small and medium sized businesses across the U.S., helping support jobs and local economies. Learn more at http://www.gecapital.com/ **

GOP MEETS WITH BIZ LEADERS in the Capitol this week and the Hill’s Jared Allen reports that Dems plans to use the meeting as evidence Republicans are industry shills. http://bit.ly/9bpIN9

ECONOMIC REPORTS – The week includes CPI, PPI and many other key reports. CalculatedRisk has the full list. http://bit.ly/bBwbW3

WHAT HAPPENED TO INFLATION? – NYT’s Paul Krugman blogs that those who feared inflation were wrong but are still winning the debate. “Now, the guys who got it all wrong are winning the political argument, in large part because the Obama administration went for half-measures, and is now being punished for a weak economy — which people like me predicted would happen. But never forget that as far as the facts go, the Keynesians won this hands down.” http://nyti.ms/a7eUms

THE RICH CUT BACK – USAToday’s Bruce Horovitz reports the rich are still spending but their luxuries are now a touch less luxurious. http://bit.ly/bArinv

SUNDAY REWIND – The White House message on the Sunday shows was that while the recovery might be slow and frustrating, the country is clearly on the right track. W.H. press secretary Robert Gibbs on NBC’s “Meet the Press”: "I'm not here to unfurl the 'Mission Accomplished' banner; we've got a lot of work to do and the president understands that … [T]he president's going to lay out a choice, look back to where we came from and look back to--look forward to where we're going … There's no doubt that things are getting better … We think that if you take a look backwards and look forwards, there's no doubt that we're on the right path." Transcript http://bit.ly/cf1qjn

W.H. Senior Adviser David Axelrod on ABC’s “This Week”: “Our job is to worry about how we get people back to work, how we move this country forward, and if -- if we do our job, the rest will take care of itself. … And, remember, elections -- the presidential election is an eternity away. Elections are about choices, though. They're not referendums. And on the other side of the ballot in November will be a party that has an economic theory, and it was tested, and it led to catastrophe … When you govern -- when you're governing in a very difficult economic time, the worst economy since the Great Depression -- and that's what we walked into -- people are going to be unhappy, and they have a right to be unhappy.” Transcript http://bit.ly/9e77Ox

BREAKING I – BP CLOSE TO SELLING STAKES – WSJ’s Guy Chazan and Dana Cimilluca report on pg. A1: “BP is in talks with U.S. independent oil and gas producer Apache Corp. on a deal worth as much as $10 billion that could include stakes in BP's vast Alaska operations … A deal, which would go a long way to helping BP cope with the financial stress of paying for the clean-up of the Gulf oil spill, could be reached in the coming weeks … The Apache deal is one of a number of options the U.K. oil major is exploring to raise cash … The talks come amid BP's efforts over the weekend to remove a containment device located over the gushing Macondo well and replace it with a much tighter cap that should collect all the leaking oil and gas. The operation, which began Saturday, will take between four and seven days, BP says.” http://bit.ly/cOR4WE

BREAKING II – YEN FALLS ON ELECTION RESULTS, Bloomberg’s Yasuhiko Seki reports: “The yen weakened against all its major counterparts after Prime Minister Naoto Kan’s party lost control of Japan’s upper house of parliament, undermining efforts to rein in the world’s largest public debt.” http://bit.ly/a2xKWz

IS THE WHITE HOUSE “ANTI-BUSINESS”? – FT’s Clive Crook weighs the evidence and says “no.”: “The idea is not groundless. Like most liberals, Mr Obama is suspicious of the profit motive, and wants the government to play a bigger role; the need for stronger regulation is a constant theme. But what did the CEOs expect of a Democratic president? Measured against what might have happened, their charges seem unfair and even absurd. They should be thanking Mr Obama for his restraint.” http://bit.ly/9udgCz

SO WHY THE ATTITUDE? – Mike O’Rourke of trading firm BTIG writes via BusinessInsider: “[T]he President spent the first 6 months ensuring that health care reform and financial reform are passed while the populist fires are still burning. Needless to say, spending the first half of the year re-regulating two major industries in the midst of an economy where the Unemployment Rate has hovered at or just below 10% for nine months hardly promotes thoughts of being business friendly.” http://bit.ly/a7Lkbd

THE RESPONSE – WSJ’s Elizabeth Williamson reports on pg. A4: “The White House has asked business leaders to identify specific regulations that they believe are obstacles to job-creating private investment. … [A]dministration officials asked business leaders to identify specific rules that could be streamlined, although the administration hasn't yet proposed revisions for any of the rules at issue.” http://bit.ly/a3eLzy

DARK WORDS ON DEFICIT – WP’s Dan Balz reports from the NGA meeting in Boston: “The co-chairmen of President Obama's debt and deficit commission offered an ominous assessment of the nation's fiscal future here Sunday, calling current budgetary trends a cancer ‘that will destroy the country from within’ unless checked by tough action in Washington.” http://bit.ly/9q8z3m

STILL WAITING ON WVA – POLITICO’s Jonathan Martin reports from Boston: “West Virginia Gov. Joe Manchin said in an interview with POLITICO Saturday that he will not announce his decision on a Senate bid until two other steps are taken: a special session of the state legislature clarifies the law determining when an election for the seat to replace the late Sen. Robert C. Byrd can be held and he names an interim successor to hold that seat in the meantime. … As for when he’ll name an interim replacement … the governor said he would meet with election attorneys Sunday night when he returned home from Boston to determine how soon he can make an appointment. ‘Can we do it earlier or do we wait until the session?’ he said. ‘They’ll give me all the pros and cons on that.’” http://bit.ly/aZdYWu

NOT IF, BUT WHEN – NYT’s David M. Herszenhorn reports: “Final passage of [Dodd-Frank] … is now a question of when — not if — according to Senate Democrats. Yet, there still seem to be a lot of questions about when. … For now, it seems that the earliest the bill could win final approval is Thursday. … Democrats already have been asking ‘when’ about the financial regulatory bill far longer than they intended. Their struggle to complete a measure that was expected to pass with wide bipartisan support has become a symbol both of the success of Senate Republican leaders in stalling the Democrats’ agenda and the political gridlock that is likely to persist through the November elections.” http://nyti.ms/aRKHkB

DILLER SLAMS GOOGLE – FT’s Richard Waters reports: “Google’s use of its search engine to support its expansion into new internet services gives it an unfair advantage and puts it on a collision course with antitrust regulators, according to a prominent US media mogul. Barry Diller, chairman of online travel company Expedia and InterActiveCorp … criticised Google for giving prominence in results to its in-house services. That had enabled it to ‘arbitrarily get in front of” other internet companies that rely on Google for traffic. ‘I think it is disturbing that Google is moving into serving individual spaces, rather than being search neutral,’ Mr Diller said. ‘It is a dangerous step because it is inevitably going to cause problems with customers and regulatory authorities.’” http://bit.ly/9N8Es6

MOM AND POP INVESTORS FLEE – WSJ’s E.S. Browning reports on pg. A1: “Many individual investors were tiptoeing back into stocks in the spring. Now, they're running for cover again. … Small investors' faith in stocks, which surged in the 1990s, has collapsed since the technology-stock debacle and the Enron and WorldCom scandals of 2000-2002. The 2007-2009 financial crisis only made things worse. Now, the pullback among ordinary investors means they are a declining force in a market that is increasingly dominated by professionals.” http://bit.ly/c1JSJJ

ALSO DRIVING THE CONVERSATION:

CENSUS TAKERS BACK AMONG THE JOBLESS – NYT’s Michael Powell reports on pg. A1: “It was a finely honed machine, this United States Census team, and it had a good run. But in the coming days and weeks, many of its members will experience the pain of unemployment — once again. … When the Census Bureau hired upward of 700,000 Americans over the last two years — most in the last six months — it landed more experienced workers with more sophisticated skills than any time in recent memory. This was the upside of the nastiest recession of the past 70 years. Now, its decennial work largely done, the Census Bureau is shedding hundreds of thousands of workers — about 225,000 in just the last few weeks, enough to account for a jot or two in the unemployment rate, say federal economists. Most of those remaining will be gone by August.” http://nyti.ms/9dCLGF

BLACKSTONE TAKES OVER BofA PORTFOLIO – FT’s Henny Sender reports: “Blackstone is taking over the management of a portfolio of Asian real estate investments from Bank of America Merrill Lynch in a deal that will provide a platform for the private equity group to do more property deals in the region. The deal, disclosed in a letter Blackstone sent its investors on Friday, is another sign of the retreat of both banks and former investment banks from the business of running real estate and corporate private equity funds. … The deal comes after Citigroup’s recent sale of its real estate investment operations to Apollo Management.” http://bit.ly/b637KI

EURO BANKS FACE NEW CRISIS – NYT’s Jack Ewing reports: “The sovereign debt crisis would seem to create worry enough for European banks, but there is another gathering threat that has not garnered as much notice: the trillions of dollars in short-term borrowing that institutions around the world must repay or roll over in the next two years. The [ECB], the Bank of England and the [IMF] have all recently warned of a looming crunch, especially in Europe, where banks have enough trouble raising money as it is. Their concern is that banks hungry for refinancing will compete with governments — which also must roll over huge sums — for the bond market’s favor. As a result, credit for business and consumers could become more costly and scarce, with unpleasant consequences for economic growth.” http://nyti.ms/aUiWVL

** A message from GE Capital: GE Capital provides critical financing to thousands of small and medium sized businesses across the U.S., helping support jobs and local economies.

** A message from the Independent Community Bankers of America: The first U.S. community banks were formed in the wake of the American Revolution to stabilize the nation’s postwar finances. By providing loans to entrepreneurs and developers, these community banks were soon stimulating economic growth and financing the rise of the world’s greatest democracy. Their legacy of relationship banking and local economic and job growth continues to this day, with more than 2,500 of the nation’s community banks in business for more than 100 years and the oldest dating to the presidency of John Adams. Today serving communities in every congressional district, community bankers nationwide urge Congress to advance tailored banking regulations that will allow these job creators to continue supporting local economic growth for decades to come. www.icba.org/aboutus **

Authors:

About The Author

Ben White is POLITICO Pro's chief economic correspondent and author of the “Morning Money” column covering the nexus of finance and public policy.

Prior to joining POLITICO in the fall of 2009, Mr. White served as a Wall Street reporter for the New York Times, where he shared a Society of Business Editors and Writers award for breaking news coverage of the financial crisis.

From 2005 to 2007, White was Wall Street correspondent and U.S. Banking Editor at the Financial Times.

White worked at the Washington Post for nine years before joining the FT. He served as national political researcher and research assistant to columnist David S. Broder and later as Wall Street correspondent.

White, a 1994 graduate of Kenyon College, has two sons and lives in New York City.